Using ICT to Create New Business Opportunities in Renewable Energy
NEC's Energy Resource Aggregation (RA) Cloud Service for a Virtual Power Plant
Nowadays, there is worldwide recognition of the importance of environmental initiatives to reduce CO2 and tackle climate change. There is also an increased global awareness of these initiatives as forming part of the environmental, social and corporate governance (ESG) vital to businesses' long-term growth.
Global technology trends suggest we are heading for a society where renewable energy, electric vehicles (EV) and photovoltaics (PV) enjoy greater proliferation and many people generate, store and use their energy. Against the background of this market trend, a balancing market is set to be established in Japan in April 2021 with participation by both existing and new businesses, bringing improvements in energy efficiency.
NEC has over half a century of experience in the energy-management business; this article introduces the value we can provide in this market environment as well as some of our previous initiatives.
NEC and the Energy Market
NEC has a long history of involvement in the energy market. "We've been closely connected with the market for almost 70 years, ever since we began supplying key communications networks for electricity providers in 1951," says Shingo Kojima, General Manager of 2nd City Infrastructure Solution Division. More recently, NEC ventured into smart-meter systems in 2007 and fault- and risk-monitoring systems for power stations in 2013. Then, in 2014, the company established NEC Energy Solutions in Boston, USA(*1) in order to globally develop our large-scale, large-capacity energy storage systems business. In the field of smart meters in particular, NEC has so far supplied over seven million communications devices and developed energy technologies coupled with the Internet of things (IoT) and artificial intelligence (AI), which have now become truly mainstream concepts.
New Developments in Japan's Electricity Infrastructure
Japan's power system is world-class: the infrastructure is solid and highly reliable, and when power cuts do occur, service is quickly restored. However, when it comes to accelerating the adoption of renewable energy, the reality of the situation is that Japan is under pressure to improve its infrastructure. "In responding to the changes in this environment, it's important that we not continue with business as usual, but that we use creativity and ingenuity to develop our business to meet this transformation in power infrastructure," says Kazuhiko Shiraishi, Senior Vice President. It is now important that rather than just relying on power companies, energy users also have a hand in the planning.
In Japan, transactions are currently carried out under the Japan Electric Power Exchange, where electrical energy is traded in kilowatt-hours, and the non-fossil fuel energy value trading market, which trades in environmental credit. In addition to these, there are plans to establish a capacity market and a balancing market in the future. The balancing market planned for 2021 will fill a particularly important role, facilitating trading of balancing power (△kW value + kWh value ) and allowing renewables, for which electricity generation output greatly fluctuates, to be used as a main source of power. It is anticipated that both existing power companies and businesses that were formerly only consumers will be able to participate in this newly established market, enlivening the market and making balancing power cheaper to procure and manage.
Energy Cloud Service Driven by the Needs of the Market and Customers
NEC is involved in the "Virtual Power Plant (VPP) Construction Demonstration Project that Utilizes Demand-Side Energy Resources," which began in 2016. The construction demonstration project aims to create balancing power by using new energy-management technology to allow remote, integrated control of energy resources like storage batteries and generation facilities owned by demand-side businesses and households. The goal is to make the distributed energy resources function just like a single power station, and to carry out a demonstration that can be applied to power balancing. Executive Expert Toru Matsushima explains the reasons why NEC developed the Cloud Service for Energy Resource Aggregation (RA Cloud Service) : "During NEC's involvement in the demonstration project, we had requests from a lot of resource aggregators to provide the functions necessary for a VPP. So, in November 2019 we developed our RA Cloud Service, which was based on the systems constructed for the demonstration project so far."
Introduction of energy resources on the demand side has progressed, with businesses and households adopting things like solar electricity, energy storage and generators in efforts to make use of renewable energy or as disaster-prevention or cost-reduction measures. As EV and PV continue to grow, we move closer to a society in which individuals generate, store and use energy. "NEC has a lot of experience in developing mission-critical monitoring-and-control technology. We believe it's our duty to put this technology and experience to use and develop a tough new service for a resilient energy society," continues Kojima. Created with NEC's ICT expertise, the RA Cloud Service is NEC's own contribution to the energy societies of the future.
Going forward, we would like to make use of this initiative carried out in Japan and get to work on energy supply-and-demand optimization on the global stage.
(September 18, 2020)